The Bloomberg Barclays US High Yield Index posted a return of 0.08% yesterday.* High yield bonds, like most other markets, opened the day flat and quiet. The VIX continued to fall yesterday as the dog days of summer weigh on the market volumes. Most investors are watching for the headlines that will come out of the meeting between the US and the EU on trade tariffs, as well as the anticipated GDP number coming out on Friday. New home sales continue to fall, with inventory and the Chinese pulling back on their buying as the catalysts.
The high yield bond market continues to have a bid in the secondary market as cash is flowing there with the absence of new-issues fueling that. Some of the lack of new-issues is because many companies are issuing floating rate loans instead of bonds. We will have more to say on this in our upcoming mid-year writing.